{"id":1052176,"date":"2025-03-19T19:30:01","date_gmt":"2025-03-19T23:30:01","guid":{"rendered":"https:\/\/www.finder.com\/ca\/?p=1052176"},"modified":"2025-10-14T17:52:01","modified_gmt":"2025-10-14T21:52:01","slug":"direct-indexing","status":"publish","type":"post","link":"https:\/\/www.finder.com\/ca\/stock-trading\/direct-indexing","title":{"rendered":"What is direct indexing and how does it work?"},"content":{"rendered":"<p>Direct indexing might be a strategy worth exploring if you\u2019d like more control over your portfolio, the potential for more tax-efficient returns or the ability to align investments with personal preferences or values.<\/p><p>With advancements in technology and a lower barrier to entry, direct indexing is more accessible now than ever. Learn more about this customizable investment strategy and how it works to see if it\u2019s a suitable option.<\/p><div class=\"keyTakeaways\">\n  <div class=\"keyTakeaways__header\">\n          <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"32\" height=\"21\" viewbox=\"0 0 314.16 201.03\" fill=\"none\">\n  <path d=\"M212.32,190.62c-19.66,0-38.8-6.44-54.42-18.24-15.63,11.79-34.77,18.24-54.42,18.24-49.84,0-90.39-40.55-90.39-90.39V9.83h199.24c49.84,0,90.39,40.55,90.39,90.39s-40.55,90.39-90.39,90.39Z\" fill=\"white\"><\/path>\n  <path d=\"M212.32,15.9c46.57,0,84.33,37.75,84.33,84.33h0c0,46.57-37.75,84.33-84.33,84.33h0c-20.75,0-39.74-7.51-54.42-19.94-14.69,12.43-33.68,19.94-54.42,19.94h0c-46.57,0-84.33-37.75-84.33-84.33V15.9h193.18M212.32,3.76H7.01v96.46c0,53.19,43.27,96.46,96.46,96.46,19.47,0,38.46-5.92,54.43-16.84,15.96,10.91,34.95,16.84,54.42,16.84,53.19,0,96.46-43.27,96.46-96.46S265.51,3.76,212.32,3.76h0Z\" fill=\"#232320\"><\/path>\n  <path d=\"M216.34,90.21c.19-1.69,1.76-2.87,3.43-2.6,11.91,1.94,22.41-7.31,20.93-20.1-.45-3.93-2.28-6.56-4.43-9.31-1.05-1.35-.74-3.34.71-4.26,15.6-9.82,31.64-1.91,40.78,13.29,11.21,18.64,11.54,47.15.53,65.94-15.41,26.3-42.91,23.48-56.04-3.04-6.09-12.29-7.47-26.4-5.92-39.93Z\" fill=\"#232320\"><\/path>\n  <path d=\"M105.92,90.21c.19-1.69,1.76-2.87,3.43-2.6,11.91,1.94,22.41-7.31,20.93-20.1-.45-3.93-2.28-6.56-4.43-9.31-1.05-1.35-.74-3.34.71-4.26,15.6-9.82,31.64-1.91,40.78,13.29,11.21,18.64,11.54,47.15.53,65.94-15.41,26.3-42.91,23.48-56.04-3.04-6.09-12.29-7.47-26.4-5.92-39.93Z\" fill=\"#232320\"><\/path>\n<\/svg>        <h3 data-toc=\"false\">Key takeaways<\/h3>\n  <\/div>\n\n    <ul>\n          <li>Direct indexing involves buying stocks listed in an index. It\u2019s different to index investing, in which you buy shares of funds that hold stocks you don\u2019t choose.<\/li>\n          <li>Direct indexing products aren\u2019t widely offered in Canada, but investors can choose to align their investments with an index and engage in tax-loss harvesting.<\/li>\n          <li>Drawbacks include fees, high minimums and possible tracking errors, but direct indexing can be suitable for those looking to reduce their capital gains tax.<\/li>\n      <\/ul>\n\n  \n  <\/div>\n<h3>What is direct indexing?<\/h3><p>Direct indexing is an investment strategy that involves investing directly in individual stocks within a given index such as the <a href=\"https:\/\/www.finder.com\/ca\/stock-trading\/invest-in-sp-500\">S&amp;P 500<\/a> instead of investing in an index indirectly through an <a href=\"https:\/\/www.finder.com\/ca\/stock-trading\/exchange-traded-funds-etfs\">exchange-traded fund (ETF)<\/a> or mutual fund.<\/p><p>So, instead of holding a fund where you have no control over the securities, direct indexing involves individually buying all or most of the stocks in an index and attempting to weight them similarly to the index. Then, as you keep an eye on the market and the index, you can manually adjust your holdings as needed. The strategy emerged in the 1990s as a method to leverage the tax benefits of individual stocks within an index, even if the index showed gains. Initially, it was predominantly employed by high-net-worth investors.<\/p><p>\u201cIndexing is an approach where you don\u2019t try to beat the market but instead try to efficiently and precisely achieve market results,\u201d explains Zach Teutsch, a fiduciary and founder of Values Added Financial, a registered investment advisory (RIA) firm in the US. \u201cDirect indexing means that, instead of using a mutual fund or ETF, you hold a representative sample of individual security positions, usually hundreds of stocks.\u201d<\/p><h3>How does direct indexing work?<\/h3><p>Direct indexing works by buying individual stocks to replicate an index and then adjusting those assets as the market fluctuates. For example, if certain stocks are underperforming, investors can sell those off and purchase better-performing shares. Direct indexing can be conducted directly by investors, but it\u2019s typically done by professional investment firms through a separately managed account (SMA).<\/p><p>Two main reasons investors choose direct indexing are increased customization and the potential for greater tax efficiency. Direct indexing allows a level of control you can\u2019t get with an index fund because, when fund investing, you only own the fund, not any of the individual securities. Owning individual stocks also lets you harvest tax losses at the individual stock level.<\/p><p>Direct indexing also gives investors more flexibility to include stocks that align with their personal or financial preferences and exclude those that don\u2019t. For example, if a company on the index makes products you\u2019d rather not support, you can exclude it from your portfolio. On the other hand, you can also buy stock in companies included on the index that are doing work you want to support.<\/p><article class=\"luna-card luna-card--primary luna-card--border\">\n  <div class=\"luna-card__block\" style=\"padding:0.7em\">\n<span style=\"font-size:0.9em; font-weight: 800; font-style: italic; text-transform: uppercase;\">Dive deeper: <\/span><a href=\"https:\/\/www.finder.com\/ca\/stock-trading\/stock-trading-cra\" style=\"text-decoration:underline; font-size:0.9em;\">Stock trading tax guide in Canada<\/a>\n<\/div>\n<\/article><h4>5 steps to implement a direct indexing strategy<\/h4><p>Whether you take a DIY approach or work with a direct indexing platform, here\u2019s how the strategy typically works.<\/p><ol><li><strong>Pick an index<\/strong>. Select an index you want to track, such as a broad market index like the S&amp;P 500 or a sector-specific index.<\/li><li><strong>Build your portfolio<\/strong>. Buy stocks that replicate your chosen index and then weight each one to mirror that index.<\/li><li><strong>Customize your portfolio<\/strong>. You can customize your portfolio by excluding certain stocks or overweighting others to more closely align with your preferences, values or investment goals. Just be careful not to deviate too far from the index, or you risk a tracking error.<\/li><li><strong>Rebalance your portfolio<\/strong>. Periodic rebalancing is critical to maintaining the desired stock allocation and ensuring that the portfolio continues to track the index\u2019s performance accurately. Most direct indexing platforms automatically rebalance your portfolio for you.<\/li><li><strong>Optimize your taxes<\/strong>. One key benefit of this strategy is tax optimization. Direct indexing platforms use a tax-loss harvesting approach that sells off losing positions in the portfolio to offset capital gains and reduce tax liabilities.<\/li><\/ol><h3>Direct indexing and tax-loss harvesting<\/h3><p>As mentioned previously, certain tax advantages of direct indexing are not as accessible when trading index funds. With direct indexing, investors can take greater advantage of the benefits of tax-loss harvesting, which entails selling off underperforming assets to offset any capital gains.<\/p>\n\n<article class=\"luna-card\" style=\"background-color: #F5FAFF; border-radius: 10px;\">  \n<div class=\"luna-card__block\" style=\"margin: 10px;\">\n<div class=\"u-grid u-grid--alignMiddle\">\n<div class=\"u-grid__col u-1\/5@s u-1\/1\" style=\"margin-bottom: 0;\">\n<img decoding=\"async\" class=\"aligncenter\" style=\"border-radius: 50% 0 50% 50%;\" src=\"https:\/\/www.finder.com\/finder-us\/wp-uploads\/2024\/05\/EmilyLuk_supplied_250x188.png\" alt=\"A photo of Emily Luk\" width=\"150\" height=\"150\" srcset=\"https:\/\/www.finder.com\/finder-us\/wp-uploads\/2024\/05\/EmilyLuk_supplied_250x188.png?fit=180 180w, https:\/\/www.finder.com\/finder-us\/wp-uploads\/2024\/05\/EmilyLuk_supplied_250x188.png?fit=360 360w, https:\/\/www.finder.com\/finder-us\/wp-uploads\/2024\/05\/EmilyLuk_supplied_250x188.png?fit=450 450w\" sizes=\"(max-width: 450px) 100vw, 450px\" loading=\"lazy\">\n<\/div>\n<div class=\"u-grid__col u-4\/5@s u-1\/1\" style=\"margin-bottom: 0;\">\n<p style=\"margin-left: 0.5em; font-size: 1.3em;\"><strong>From an investment expert: Using investment losses to your benefit<\/strong><\/p>\n<blockquote style=\"font-size: 1em;\">Not all investments will be a winner; even the most successful investors understand there's room for chance. In volatile markets, where stocks constantly fluctuate, you can use a tax-loss harvesting approach to your benefit. With this strategic strategy, you're using losses to lower your tax liability both now and later.<\/blockquote>\n <p style=\"text-align: right; font-size: 0.9em;\">\u2014 Emily Luk, CPA, CFA and co-founder of Plenty<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n\n\n<a name=\"first-hand-experience\"><\/a><p>While tax-loss harvesting can be applied to ETFs, you can only harvest the losses if the fund itself has gone down in value from where you bought it. By contrast, direct indexing tax-loss harvesting is done at the stock level, many of which might be down at any given time, giving you more opportunities to realize losses.<\/p><p>Harvesting losses just isn\u2019t as efficient with an index fund, explains Andrew Grauberg, CEO and President of ABC Quant, a provider of risk management and investment solutions for the hedge fund industry.<\/p><p>\u201cIn simpler terms, you can lower your taxes by deducting losses from stocks that have generated negative returns during the taxable period. You can\u2019t do the same with an index-tracking ETF, because you cannot separate [the] performance of individual stocks from the fund itself.\u201d<\/p><h3>Direct indexing is more accessible now than ever<\/h3><p>Direct indexing is not a new investment strategy, but it has recently become more accessible to a wider range of investors. Historically, direct indexing was a strategy meant only for institutional investors or the very wealthy, mainly because minimum investment requirements were so high, says Teutsch.<\/p><p>\u201cDirect indexing used to be almost exclusively for ultra-high-net-worth families, but as the technology has improved, investment minimums have decreased and it is available to a much wider variety of people. It primarily makes sense for people who have ~$100K or more invested in US stocks in a taxable investment account. Some providers have pushed that number as low as $5,000, but then the benefits might not be sufficient to offset the hassle.\u201d<\/p><p>Plus, many brokerage firms don\u2019t charge account fees and now offer <a href=\"https:\/\/www.finder.com\/ca\/stock-trading\/fractional-shares\">fractional share trading<\/a> and zero-commission trades. These innovations help make this type of strategy more affordable for less affluent investors who want to try this on their own or with the assistance of a <a href=\"https:\/\/www.finder.com\/ca\/stock-trading\/best-financial-advisors\">professional advisor<\/a>.<\/p><p>However, even though it may be less expensive now, it\u2019s still a time-consuming and complicated process to replicate an index and continually rebalance as needed. But with the rise in <a href=\"https:\/\/www.finder.com\/ca\/investments\/robo-advisors\">robo-advisors<\/a>, direct indexing is even more accessible. For example, Wealthsimple offers robo-advisory services (Managed Investing accounts) with automatic portfolio rebalancing and tax-loss harvesting, so even the most hands-off types of investors can get in on the game.<\/p><h4>Are there any direct indexing platforms in Canada?<\/h4><p>Unfortunately, products specifically designed for direct indexing have yet to become widely adopted by Canadian investment platforms. RBC is one of the few investment firms to offer direct indexing through a partnership with McRae Wealth Management Group.<\/p><p>In the US, investment firms like Charles Schwab, Fidelity Investments, Frec and Wealthfront offer direct indexing products with annual advisory fees ranging from around 0.1% to 0.4% and minimum investment amounts as low as $5,000 USD and high as $100,000 USD.<\/p><h3>Benefits of direct indexing<\/h3><p>Direct indexing is a worthwhile strategy for several reasons.<\/p><ul><li><strong>Customization<\/strong>. When you buy an ETF or mutual fund, you have no choice in the component stocks. Direct indexing lets you opt out of companies that don\u2019t align with your social or financial goals and buy ones that more closely reflect your values.<\/li><li><strong>Tax efficiency<\/strong>. Because you\u2019re individually buying and selling stocks, you can take advantage of tax-loss harvesting at the stock level.<\/li><li><strong>Risk management<\/strong>. Not only can you customize your portfolio based on your values, you can also use direct indexing to avoid certain sectors or companies that you feel are too risky.<\/li><\/ul><h3>Downsides of direct indexing<\/h3><p>Every investment strategy has its own set of risks or potential pitfalls to be aware of.<\/p><ul><li><strong>Ongoing portfolio management fees<\/strong>. Unless you plan to do all the work yourself, you\u2019ll have to pay someone to manage your investment account, which could be around 1% or more annually.<\/li><li><strong>High minimum investment requirements<\/strong>. Investment requirements for direct indexing have decreased, but many US firms require at least a $100,000 USD minimum investment, which can still be too high for many investors. There are firms with lower minimums, but some experts agree that the strategy may not be worth the effort for smaller investments.<\/li><li><strong>Not suitable for investors with RRSPs<\/strong>. If your primary means of investing is through a tax-advantaged retirement account, direct indexing doesn\u2019t make sense. You typically need a separate, taxed brokerage account to enjoy the tax benefits of direct indexing. You don\u2019t pay capital gains taxes or deduct losses on retirement accounts as long as the money remains in the account, so there\u2019s no immediate tax benefit to offset capital gains with harvested losses. Tax-loss harvesting is a primary reason for using the direct indexing strategy.<\/li><li><strong>Potential for tracking error<\/strong>. If you overly customize your portfolio or fail to track index changes, your performance could stray from the index\u2019s performance.<\/li><\/ul><article class=\"luna-card luna-card--primary luna-card--border\">\n  <div class=\"luna-card__block\" style=\"padding:0.7em\">\n<span style=\"font-size:0.9em; font-weight: 800; font-style: italic; text-transform: uppercase;\">Must read: <\/span><a href=\"https:\/\/www.finder.com\/ca\/stock-trading\/best-stock-trading-apps-in-canada\" style=\"text-decoration:underline; font-size:0.9em;\">Our top picks for the best brokerage accounts in Canada<\/a>\n<\/div>\n<\/article><h3>Is direct indexing right for you?<\/h3><p>Direct indexing might be a good idea if you have a fairly large sum to invest and want to try your hand at duplicating the performance of an index. It\u2019s also a solid strategy for those who typically have a large capital gains tax bill. Finally, it can often be a more satisfying option for investors who prefer to have a more customized and flexible portfolio.<\/p><p>However, you may want to consider alternative investment strategies if you don\u2019t have a lot of money to invest, your primary investment vehicle is a tax-advantaged retirement account or you don\u2019t want to pay to have your account professionally managed.<\/p><p>Direct indexing can be complex and requires diligent management to optimize tax efficiency and achieve desired outcomes. While some investors may choose to handle direct indexing themselves, others may prefer professional portfolio managers for their expertise, resources and ability to navigate the nuances of the strategy effectively.<\/p><h3>Bottom line<\/h3><p>As with any investment decision, it\u2019s important to consider your level of risk tolerance and involvement style, financial goals, tax concerns and other factors before deciding if direct indexing makes sense in your situation. It\u2019s always a smart move to explore <a href=\"https:\/\/www.finder.com\/ca\/stock-trading\/best-way-to-invest-money\">multiple investment options<\/a> with your specific objectives in mind so you can find the best investment strategy for you.<\/p><h3>Frequently asked questions<\/h3><ul class=\"luna-accordionGroup accordionGroup\">\n\t<li class=\"luna-accordion\" data-accordion=\"accordion\">\n    <div class=\"luna-accordion__summary\">\n        <h4 class=\"luna-accordion__heading\">\n            <button class=\"luna-accordion__action collapsed\" aria-expanded=\"false\" aria-controls=\"faq-builder-0000000000\" data-toggle=\"collapse\" data-target=\"#faq-builder-0000000000\">\n                <span class=\"luna-accordion__title\">What are my options to manage my direct indexing account?<\/span>\n                <svg class=\"luna-icon\" aria-hidden=\"true\">\n                    <use xlink:href=\"#chevron-down\" data-accordion-icon=\"show\"><\/use>\n                    <use xlink:href=\"#chevron-up\" data-accordion-icon=\"hide\" class=\"is-hidden\"><\/use>\n                <\/svg>\n            <\/button>\n        <\/h4>\n    <\/div>\n    <div class=\"luna-accordion__details collapse\" aria-hidden=\"true\" id=\"faq-builder-0000000000\" data-accordion=\"details\">\n        <div class=\"accordionContent\">\n            <div>\n                <p>You can opt to buy, sell and manage your own portfolio, but that takes a lot of time and expertise. You could also use a robo-advisor platform or a separately managed account, which will do the work for you. However, a robo-advisor takes away some control. You could instead hire a professional advisor to help manage the account, but you'll still have the flexibility to make your own decisions.<\/p>\n            <\/div>\n        <\/div>\n    <\/div>\n<\/li>\n<li class=\"luna-accordion\" data-accordion=\"accordion\">\n    <div class=\"luna-accordion__summary\">\n        <h4 class=\"luna-accordion__heading\">\n            <button class=\"luna-accordion__action collapsed\" aria-expanded=\"false\" aria-controls=\"faq-builder-0000000001\" data-toggle=\"collapse\" data-target=\"#faq-builder-0000000001\">\n                <span class=\"luna-accordion__title\">Do I need a separate account to manage my direct indexing portfolio?<\/span>\n                <svg class=\"luna-icon\" aria-hidden=\"true\">\n                    <use xlink:href=\"#chevron-down\" data-accordion-icon=\"show\"><\/use>\n                    <use xlink:href=\"#chevron-up\" data-accordion-icon=\"hide\" class=\"is-hidden\"><\/use>\n                <\/svg>\n            <\/button>\n        <\/h4>\n    <\/div>\n    <div class=\"luna-accordion__details collapse\" aria-hidden=\"true\" id=\"faq-builder-0000000001\" data-accordion=\"details\">\n        <div class=\"accordionContent\">\n            <div>\n                <p>Technically, you don't need a new account to use a direct indexing strategy, but it could make more sense. For example, if you are trying to monitor the benchmark index yourself, it can be much easier to compare it to your portfolio's performance if those stocks are the only assets in that account. Also, some direct indexing providers may only offer their product as a separately managed account.<\/p>\n            <\/div>\n        <\/div>\n    <\/div>\n<\/li>\n<li class=\"luna-accordion\" data-accordion=\"accordion\">\n    <div class=\"luna-accordion__summary\">\n        <h4 class=\"luna-accordion__heading\">\n            <button class=\"luna-accordion__action collapsed\" aria-expanded=\"false\" aria-controls=\"faq-builder-0000000002\" data-toggle=\"collapse\" data-target=\"#faq-builder-0000000002\">\n                <span class=\"luna-accordion__title\">Direct indexing vs ETF investing: Which is better?<\/span>\n                <svg class=\"luna-icon\" aria-hidden=\"true\">\n                    <use xlink:href=\"#chevron-down\" data-accordion-icon=\"show\"><\/use>\n                    <use xlink:href=\"#chevron-up\" data-accordion-icon=\"hide\" class=\"is-hidden\"><\/use>\n                <\/svg>\n            <\/button>\n        <\/h4>\n    <\/div>\n    <div class=\"luna-accordion__details collapse\" aria-hidden=\"true\" id=\"faq-builder-0000000002\" data-accordion=\"details\">\n        <div class=\"accordionContent\">\n            <div>\n                <p>Neither one is necessarily \"better\" than the other. Index ETFs are rarely a bad idea because they give you a stake in all the stocks within an index, thereby spreading out your risk. But you have no choice over which stocks are included or how they are weighted. Direct indexing might make more sense if you prefer having the ability to customize your profile to align with your social and financial goals or want to mitigate capital gains taxes.<\/p>\n            <\/div>\n        <\/div>\n    <\/div>\n<\/li>\n<li class=\"luna-accordion\" data-accordion=\"accordion\">\n    <div class=\"luna-accordion__summary\">\n        <h4 class=\"luna-accordion__heading\">\n            <button class=\"luna-accordion__action collapsed\" aria-expanded=\"false\" aria-controls=\"faq-builder-0000000003\" data-toggle=\"collapse\" data-target=\"#faq-builder-0000000003\">\n                <span class=\"luna-accordion__title\">What are the tax benefits of direct indexing?<\/span>\n                <svg class=\"luna-icon\" aria-hidden=\"true\">\n                    <use xlink:href=\"#chevron-down\" data-accordion-icon=\"show\"><\/use>\n                    <use xlink:href=\"#chevron-up\" data-accordion-icon=\"hide\" class=\"is-hidden\"><\/use>\n                <\/svg>\n            <\/button>\n        <\/h4>\n    <\/div>\n    <div class=\"luna-accordion__details collapse\" aria-hidden=\"true\" id=\"faq-builder-0000000003\" data-accordion=\"details\">\n        <div class=\"accordionContent\">\n            <div>\n                <p>For investors who realize significant capital gains, those wins can translate into hefty tax bills. If you use a direct indexing strategy, you can take advantage of tax-loss harvesting at the stock level\u2014selling off underperforming stocks at a loss\u2014to potentially offset or reduce your tax bill.<\/p>\n            <\/div>\n        <\/div>\n    <\/div>\n<\/li>\n\n<\/ul>\n<div id=\"sources\" style=\"position: relative;\"><h3 style=\"position: absolute; width: 1px; height: 1px; padding: 0; margin: -1px; overflow: hidden; clip: rect(0,0,0,0); white-space: nowrap; border: 0;\">Sources<\/h3>\n<div id=\"lazy0000000004\"><\/div>\n<script type=\"application\/json\" id=\"lazyloaded-assets-json-lazy0000000004\" class=\"lazyloaded-assets-json\">{\"critical-scripts\":[],\"scripts\":[\"https:\\\/\\\/www.finder.com\\\/parent-theme\\\/shortcodes\\\/article-source\\\/prod\\\/article-source.de087a0da9824e407767.js\"],\"styles\":[\"https:\\\/\\\/www.finder.com\\\/parent-theme\\\/shortcodes\\\/article-source\\\/prod\\\/article-source.87684078d471e76125dd.css\"]}<\/script><\/div><article class=\"luna-card luna-card--alt\"><div class=\"luna-card__block has-padding-small\"><b>Important information:<\/b> Powered by <a href=\"https:\/\/www.finder.com\/ca\/\">Finder.com<\/a>. This information is general in nature and is no substitute for professional advice. It does not take into account your personal situation. This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for most investors. You do not own or have any interest in the underlying asset. Capital is at risk, including the risk of losing more than the amount originally put in, market volatility and liquidity risks. Past performance is no guarantee of future results. Tax on profits may apply. Consider the Product Disclosure Statement and Target Market Determination for the product on the provider's website. Consider your own circumstances, including whether you can afford to take the high risk of losing your money and possess the relevant experience and knowledge. We recommend that you obtain independent advice from a suitably licensed financial advisor before making any trades.<\/div><\/article>\n<div class=\"contentFeed contentFeed--relatedPosts\">\n            <h3 class=\"contentFeed__title\">More on investing<\/h3>\n        <div class=\"contentFeed__carousel\" data-post-count=\"3\">\n                                    <div class=\"fin-carousels fin-carousels--multiple-items-in-view\" id=\"fin-carousel0000000000\" data-items-in-view=\"3\" style=\"--items-in-view: 3\">\n    <div class=\"fin-carousels__container\">\n        <div class=\"fin-carousels__slides\">\n                                <div class=\"fin-carousel-item\">\n                <article class=\"luna-card luna-card--stretch\">        <figure class=\"luna-card__figure\">        <a href=\"https:\/\/www.finder.com\/ca\/stock-trading\/buy-spacex-stock\">            <picture>                <source type=\"image\/webp\" data-srcset=\"https:\/\/www.finder.com\/finder-us\/wp-uploads\/sites\/5\/2026\/04\/SpaceX-3_Supplied_450x250.jpg?fit=180&amp;webp=1 180w, https:\/\/www.finder.com\/finder-us\/wp-uploads\/sites\/5\/2026\/04\/SpaceX-3_Supplied_450x250.jpg?fit=360&amp;webp=1 360w, https:\/\/www.finder.com\/finder-us\/wp-uploads\/sites\/5\/2026\/04\/SpaceX-3_Supplied_450x250.jpg?fit=450&amp;webp=1 450w\" data-sizes=\"(max-width: 600px) 100vw, 35vw\"><\/source>                <img decoding=\"async\" class=\"luna-image\" src=\"data:image\/svg+xml;base64,PHN2ZyB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciIHdpZHRoPSI5IiBoZWlnaHQ9IjUiIHN0eWxlPSJiYWNrZ3JvdW5kLWNvbG9yOiAjRjVGNkY3OyIvPg==\" data-src=\"https:\/\/www.finder.com\/finder-us\/wp-uploads\/sites\/5\/2026\/04\/SpaceX-3_Supplied_450x250.jpg\" data-srcset=\"https:\/\/www.finder.com\/finder-us\/wp-uploads\/sites\/5\/2026\/04\/SpaceX-3_Supplied_450x250.jpg?fit=180 180w, https:\/\/www.finder.com\/finder-us\/wp-uploads\/sites\/5\/2026\/04\/SpaceX-3_Supplied_450x250.jpg?fit=360 360w, https:\/\/www.finder.com\/finder-us\/wp-uploads\/sites\/5\/2026\/04\/SpaceX-3_Supplied_450x250.jpg?fit=450 450w\" data-sizes=\"(max-width: 600px) 100vw, 35vw\" alt=\"SpaceX\" loading=\"lazy\">            <\/picture>        <\/a>    <\/figure>        <div class=\"luna-card__block\">                            <div class=\"contentFeed__pills\">                                                    <span class=\"contentFeed__pill contentFeed__pill--category\">Stock Trading<\/span>                            <\/div>                        <header>            <p class=\"luna-card__title luna-card__title--small\">                <a href=\"https:\/\/www.finder.com\/ca\/stock-trading\/buy-spacex-stock\">How to buy SpaceX stock in Canada when it goes public<\/a>            <\/p>        <\/header>        <p>Here\u2019s what we know about the SpaceX IPO plus information on how to buy in from Canada.<\/p>                    <\/div>        <\/article>            \n<\/div>\n                    <div class=\"fin-carousel-item\">\n                <article class=\"luna-card luna-card--stretch\">        <figure class=\"luna-card__figure\">        <a href=\"https:\/\/www.finder.com\/ca\/stock-trading\/ethereum-treasuries\">            <picture>                <source type=\"image\/webp\" data-srcset=\"https:\/\/www.finder.com\/finder-us\/wp-uploads\/sites\/5\/2025\/09\/Ethereumlogo_Supplied_450x250.jpg?fit=180&amp;webp=1 180w, https:\/\/www.finder.com\/finder-us\/wp-uploads\/sites\/5\/2025\/09\/Ethereumlogo_Supplied_450x250.jpg?fit=360&amp;webp=1 360w, https:\/\/www.finder.com\/finder-us\/wp-uploads\/sites\/5\/2025\/09\/Ethereumlogo_Supplied_450x250.jpg?fit=450&amp;webp=1 450w\" data-sizes=\"(max-width: 600px) 100vw, 35vw\"><\/source>                <img decoding=\"async\" class=\"luna-image\" src=\"data:image\/svg+xml;base64,PHN2ZyB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciIHdpZHRoPSI5IiBoZWlnaHQ9IjUiIHN0eWxlPSJiYWNrZ3JvdW5kLWNvbG9yOiAjRjVGNkY3OyIvPg==\" data-src=\"https:\/\/www.finder.com\/finder-us\/wp-uploads\/sites\/5\/2025\/09\/Ethereumlogo_Supplied_450x250.jpg\" data-srcset=\"https:\/\/www.finder.com\/finder-us\/wp-uploads\/sites\/5\/2025\/09\/Ethereumlogo_Supplied_450x250.jpg?fit=180 180w, https:\/\/www.finder.com\/finder-us\/wp-uploads\/sites\/5\/2025\/09\/Ethereumlogo_Supplied_450x250.jpg?fit=360 360w, https:\/\/www.finder.com\/finder-us\/wp-uploads\/sites\/5\/2025\/09\/Ethereumlogo_Supplied_450x250.jpg?fit=450 450w\" data-sizes=\"(max-width: 600px) 100vw, 35vw\" alt=\"Ethereum\" loading=\"lazy\">            <\/picture>        <\/a>    <\/figure>        <div class=\"luna-card__block\">                            <div class=\"contentFeed__pills\">                                                    <span class=\"contentFeed__pill contentFeed__pill--category\">Stock Trading<\/span>                            <\/div>                        <header>            <p class=\"luna-card__title luna-card__title--small\">                <a href=\"https:\/\/www.finder.com\/ca\/stock-trading\/ethereum-treasuries\">Ethereum treasury companies<\/a>            <\/p>        <\/header>        <p>We break down which companies hold Ethereum, why they\u2019re doing it and what ETH treasuries mean for markets and investors.<\/p>                    <\/div>        <\/article>            \n<\/div>\n                    <div class=\"fin-carousel-item\">\n                <article class=\"luna-card luna-card--stretch\">        <figure class=\"luna-card__figure\">        <a href=\"https:\/\/www.finder.com\/ca\/stock-trading\/euro-stoxx-50\">            <picture>                <source type=\"image\/webp\" data-srcset=\"https:\/\/www.finder.com\/finder-us\/wp-uploads\/sites\/5\/2025\/07\/STOXX_Supplied_450x250.jpg?fit=180&amp;webp=1 180w, https:\/\/www.finder.com\/finder-us\/wp-uploads\/sites\/5\/2025\/07\/STOXX_Supplied_450x250.jpg?fit=360&amp;webp=1 360w, https:\/\/www.finder.com\/finder-us\/wp-uploads\/sites\/5\/2025\/07\/STOXX_Supplied_450x250.jpg?fit=450&amp;webp=1 450w\" data-sizes=\"(max-width: 600px) 100vw, 35vw\"><\/source>                <img decoding=\"async\" class=\"luna-image\" src=\"data:image\/svg+xml;base64,PHN2ZyB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciIHdpZHRoPSI5IiBoZWlnaHQ9IjUiIHN0eWxlPSJiYWNrZ3JvdW5kLWNvbG9yOiAjRjVGNkY3OyIvPg==\" data-src=\"https:\/\/www.finder.com\/finder-us\/wp-uploads\/sites\/5\/2025\/07\/STOXX_Supplied_450x250.jpg\" data-srcset=\"https:\/\/www.finder.com\/finder-us\/wp-uploads\/sites\/5\/2025\/07\/STOXX_Supplied_450x250.jpg?fit=180 180w, https:\/\/www.finder.com\/finder-us\/wp-uploads\/sites\/5\/2025\/07\/STOXX_Supplied_450x250.jpg?fit=360 360w, https:\/\/www.finder.com\/finder-us\/wp-uploads\/sites\/5\/2025\/07\/STOXX_Supplied_450x250.jpg?fit=450 450w\" data-sizes=\"(max-width: 600px) 100vw, 35vw\" alt=\"STOXX\" loading=\"lazy\">            <\/picture>        <\/a>    <\/figure>        <div class=\"luna-card__block\">                            <div class=\"contentFeed__pills\">                                                    <span class=\"contentFeed__pill contentFeed__pill--category\">Stock Trading<\/span>                            <\/div>                        <header>            <p class=\"luna-card__title luna-card__title--small\">                <a href=\"https:\/\/www.finder.com\/ca\/stock-trading\/euro-stoxx-50\">How to invest in the EURO STOXX 50<\/a>            <\/p>        <\/header>        <p>Want to invest in the Euro Stoxx 50 in Canada? Explore investment platforms and popular Euro Stoxx 50 index funds.<\/p>                    <\/div>        <\/article>            \n<\/div>\n                \n        <\/div>\n    <\/div>\n    <div class=\"fin-carousels__controls\">\n        <button class=\"fin-carousels__nav fin-carousels__nav--prev fin-carousels__nav--disabled\" aria-label=\"Previous slide\">\n            <svg class=\"luna-icon\" style=\"--fill: var(--color-background-main)\">\n                <use href=\"#chevron-left\"><\/use>\n            <\/svg>\n        <\/button>\n        <button class=\"fin-carousels__nav fin-carousels__nav--next fin-carousels__nav--disabled\" aria-label=\"Next slide\">\n            <svg class=\"luna-icon\" style=\"--fill: var(--color-background-main)\">\n                <use href=\"#chevron-right\"><\/use>\n            <\/svg>\n        <\/button>\n    <\/div>\n\n    <div class=\"fin-carousels__dots\" role=\"tablist\" aria-label=\"Carousel navigation\"><!-- Dots will be generated by JavaScript -->\n    <\/div>\n<\/div>\n\n    <\/div>\n<\/div>","protected":false},"excerpt":{"rendered":"<p>Direct investing is an alternative to index fund investing, and it lets you take advantage of tax-loss harvesting. But it&#8217;s still new in Canada.<\/p>\n","protected":false},"author":1357,"featured_media":1055026,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"apple_news_api_created_at":"","apple_news_api_id":"","apple_news_api_modified_at":"","apple_news_api_revision":"","apple_news_api_share_url":"","apple_news_cover_media_provider":"image","apple_news_coverimage":0,"apple_news_coverimage_caption":"","apple_news_cover_video_id":0,"apple_news_cover_video_url":"","apple_news_cover_embedwebvideo_url":"","apple_news_is_hidden":"","apple_news_is_paid":"","apple_news_is_preview":"","apple_news_is_sponsored":"","apple_news_maturity_rating":"","apple_news_metadata":"\"\"","apple_news_pullquote":"","apple_news_pullquote_position":"","apple_news_slug":"","apple_news_sections":[],"apple_news_suppress_video_url":false,"apple_news_use_image_component":false,"nicheCode":"","productId":"","enableOptimizely":false,"_persistent_nav_menu_items":[],"blockTemplateId":"","_post_hreflang":"en","related_url":"\/direct-indexing","footnotes":""},"categories":[38411],"tags":[],"asset_tag":[],"class_list":["post-1052176","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stock-trading"],"apple_news_notices":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.9 (Yoast SEO v24.9) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What Is Direct Indexing and How Does It Work?<\/title>\n<meta name=\"description\" content=\"Direct indexing is a potentially advantageous alternative to index fund investing. But direct indexing products aren&#039;t widespread in Canada.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.finder.com\/ca\/stock-trading\/direct-indexing\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What Is Direct Indexing and How Does It Work?\" \/>\n<meta property=\"og:description\" content=\"Direct indexing is a potentially advantageous alternative to index fund investing. But direct indexing products aren&#039;t widespread in Canada.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.finder.com\/ca\/stock-trading\/direct-indexing\" \/>\n<meta property=\"og:site_name\" content=\"Finder Canada\" \/>\n<meta property=\"article:published_time\" content=\"2025-03-19T23:30:01+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/cdn.finder.com.au\/finder-us\/wp-uploads\/sites\/5\/2025\/02\/whatisdirectindexing_Supplied_1800x1000.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1800\" \/>\n\t<meta property=\"og:image:height\" content=\"1000\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Lacey Stark\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Lacey Stark\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"12 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.finder.com\/ca\/stock-trading\/direct-indexing#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.finder.com\/ca\/stock-trading\/direct-indexing\"},\"author\":{\"name\":\"Lacey Stark\",\"@id\":\"https:\/\/www.finder.com\/ca\/#\/schema\/person\/c4e4cc924b8858441d482327e7ef0346\"},\"headline\":\"What is direct indexing and how does it work?\",\"datePublished\":\"2025-03-19T23:30:01+00:00\",\"dateModified\":\"2025-03-19T21:32:33+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.finder.com\/ca\/stock-trading\/direct-indexing\"},\"wordCount\":2392,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/www.finder.com\/ca\/#organization\"},\"image\":{\"@id\":\"https:\/\/www.finder.com\/ca\/stock-trading\/direct-indexing#primaryimage\"},\"thumbnailUrl\":\"https:\/\/cdn.finder.com.au\/finder-us\/wp-uploads\/sites\/5\/2025\/02\/whatisdirectindexing_Supplied_1800x1000.jpg\",\"articleSection\":[\"Stock Trading\"],\"inLanguage\":{\"@type\":\"Language\",\"name\":\"English\",\"alternateName\":\"en\"},\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.finder.com\/ca\/stock-trading\/direct-indexing#respond\"]}],\"editor\":{\"@id\":\"https:\/\/www.finder.com\/ca\/#\/schema\/person\/784654a651a2874261e8007614422c55\"},\"citation\":[{\"@type\":\"CreativeWork\",\"name\":\"Kitces: The Four Types Of Direct Indexing And Technology Solutions For Advisors, February 16, 2022\",\"url\":\"https:\/\/www.kitces.com\/blog\/direct-indexing-strategies-esg-sri-personalized-tax-loss-harvesting-rules-based-technology-platforms\/\"},{\"@type\":\"CreativeWork\",\"name\":\"Values Added Financial: Bio\u2014Zach Teutsch, Accessed March 19, 2025\",\"url\":\"https:\/\/valuesaddedfinancial.com\/bio-zach-teutsch\/\"},{\"@type\":\"CreativeWork\",\"name\":\"RBC: Custom Direct Investing, Accessed March 19, 2025\",\"url\":\"https:\/\/ca.rbcwealthmanagement.com\/web\/mcrae.wealth\/custom-direct-investing\"}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.finder.com\/ca\/stock-trading\/direct-indexing\",\"url\":\"https:\/\/www.finder.com\/ca\/stock-trading\/direct-indexing\",\"name\":\"What Is Direct Indexing and How Does It Work?\",\"isPartOf\":{\"@id\":\"https:\/\/www.finder.com\/ca\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.finder.com\/ca\/stock-trading\/direct-indexing#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.finder.com\/ca\/stock-trading\/direct-indexing#primaryimage\"},\"thumbnailUrl\":\"https:\/\/cdn.finder.com.au\/finder-us\/wp-uploads\/sites\/5\/2025\/02\/whatisdirectindexing_Supplied_1800x1000.jpg\",\"datePublished\":\"2025-03-19T23:30:01+00:00\",\"dateModified\":\"2025-03-19T21:32:33+00:00\",\"description\":\"Direct indexing is a potentially advantageous alternative to index fund investing. 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You could also use a robo-advisor platform or a separately managed account, which will do the work for you. However, a robo-advisor takes away some control. You could instead hire a professional advisor to help manage the account, but you'll still have the flexibility to make your own decisions.\\r\"}},{\"@type\":\"Question\",\"name\":\"Do I need a separate account to manage my direct indexing portfolio?\",\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"\\rTechnically, you don't need a new account to use a direct indexing strategy, but it could make more sense. For example, if you are trying to monitor the benchmark index yourself, it can be much easier to compare it to your portfolio's performance if those stocks are the only assets in that account. Also, some direct indexing providers may only offer their product as a separately managed account.\\r\"}},{\"@type\":\"Question\",\"name\":\"Direct indexing vs ETF investing: Which is better?\",\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"\\rNeither one is necessarily \\\"better\\\" than the other. Index ETFs are rarely a bad idea because they give you a stake in all the stocks within an index, thereby spreading out your risk. But you have no choice over which stocks are included or how they are weighted. Direct indexing might make more sense if you prefer having the ability to customize your profile to align with your social and financial goals or want to mitigate capital gains taxes.\\r\"}},{\"@type\":\"Question\",\"name\":\"What are the tax benefits of direct indexing?\",\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"\\rFor investors who realize significant capital gains, those wins can translate into hefty tax bills. 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